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Monday
Dec202010

Trouble For BAE's U.K. Plea Deal

A judge in London today adjourned sentencing of BAE under its plea deal with the Serious Fraud Office until tomorrow -- "after hearing submissions and argument about the nature" of certain payments by BAE in Africa, according to an updated report in thebriberyact.com.

A report from the Financial Times is here.

BAE first announced the settlement with the U.K.'s Serious Fraud Office in February this year. In March, Britain's biggest arms maker pleaded guilty in the U.S. to conspiring to defraud the United States by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act compliance program, and to violate the Arms Export Control Act and International Traffic in Arms Regulations. It was sentenced to pay a $400 million criminal fine.

In the U.K. plea, BAE is admitting accounting errors related to overseas sales but not to actual bribery.

According to an earlier report in today's Guardian newspaper, the judge in London "said he could not sentence the company without hearing more evidence." He said he wants to call witnesses to determine "whether some of the payments had been channelled corruptly to decision makers in Tanzania."

Other British courts have questioned settlement deals agreed by the SFO, throwing into doubt the U.K.'s participation in global anti-corruption enforcement actions.

In May this year, a U.K. appellate court approved the SFO's plea deal with a former employee of DePuy who admitted bribing Greek doctors. But the appellate court also called the SFO's U.S.-style plea bargaining unconstitutional.

A few months earlier, at a hearing in London to consider the SFO's plea deal with Innospec, Lord Justice Thomas, the deputy head of criminal justice in the U.K. courts, said: “I have concluded that the director of the SFO had no power to enter into the arrangements made and no such arrangements should be made again.” Although the judge confirmed the U.K. part of the fine agreed by the SFO, he called the amount "wholly inadequate."

British civil groups, the Guardian said, have criticized BAE's deal as too lenient.

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